Houston companies' Colorado energy production faces delays from flood

As nearly 2,000 Colorado oil and gas wells have been shut-in due to flash flooding, Anadarko Petroleum Corp. (NYSE: APC) is bearing the brunt of the outages across northern Colorado’s Denver-Julesburg basin, analysts said.

The Woodlands-based exploration and production company has shut in 670 — or 12 percent — of its 5,800 Colorado wells, while Houston-based Noble Energy Inc. (NYSE: NBL) has shut-in between 600 and 700 wells, up to 10 percent.

Analysts at Raymond James and Associates Inc. in Houston said the companies will need to inspect wells individually before they can be restarted — a process that’s been delayed by ongoing flooding.

It could take two weeks for companies with significant operations in the area to return to work, Raymond James analysts said.

The historic rains took on “biblical” proportions, the National Weather Service said, describing the disaster in Colorado as homes and roadways were washed away. At least six people have died.

Flash floods triggered the shut-in and evacuations of almost 2,000 oil and gas wells. The DJ Basin, Colorado’s richest oil field, remains under water, and environmental concerns are now being raised, the Denver Post is reporting.

Anadarko said that about 250 tank batteries, used to store crude oil and natural gas as it comes out of the well, have been shut down — out of a total of 2,535 — and about 20 miles of pipeline, of more than 3,200 miles, had been shut down, the DBJ reports.

Four of the 13 rigs Anadarko had working in the field have halted due to access issues on the flooded roads.

But work also is continuing, Anadarko said.

“Processing and compression has not been impacted and the majority of completions crews are working,” the company said on its website.

However, “future work will be delayed until road repairs and conditions allow for equipment transport,” the company said.

Anadarko also said it’s contributing $500,000 to various agencies working on flood relief and response.

Noble said in a statement that it’s monitoring the facilities impacted by the flood and hasn’t seen any release of oil. A natural gas release has been found from two damaged wellheads. The company said that because the wellheads are inaccessible, the amount of gas released is unknown. However, both are low-volume producers.

Noble, which has been operating in Colorado for more than 30 years and has about 1,000 workers in the state, is among the companies making donations to help with disaster relief. Noble has chipped in $500,000 and has also established an employee match program, up to $1,000 per person, the company said.

Houston-based ConocoPhillips (NYSE: COP) has about 130,000 acres of assets in the DJ Basin. They have donated $200,000 to the American Red Cross for relief efforts, and will match the donations of U.S. employees and retirees. Houston-based Phillips 66 (NYSE: PSX) also said it will contribute $250,000 to the American Red Cross and will match employee and retiree contributions to the disaster relief.